Bedding into better practices with Search Acumen: how digital transformation can unlock the UK’s PBSA potential
The UK’s persistent PBSA supply crisis is at a nexus of three key challenges facing the broader property market. Unfavourable macroeconomic conditions and excessive red tape in the regulatory environment will be two issues familiar to those in the industry. Though the last issue often goes unnoticed – our antiquated legal practices.
The challenge is a large one. According to Knight Frank, of the estimated 160,000 beds in the student housing pipeline, only 22% are currently under construction and less than half (78,000 beds) hold full planning permission.
So, while the Chancellor’s Autumn Budget set out a clear commitment to boost housebuilding by unlocking financing and loosening planning constraints, addressing some concerns, there still remain significant barriers to friction-free student housing provision.
One often-overlooked obstacle is the protracted legal processes involved, as lawyers working on large property portfolios are held back by the amount of time careful due diligence work requires, slowing progress. Fortunately, this is an area where meaningful and rapid advancements through digitisation can be made to further unlock the potential of the UK’s PBSA sector.
Streamlining the legal process is an effective lever for eliminating delays in transactions and expediting the delivering of new housing. AI and digitalisation offer powerful solutions to speeding up these legal bottlenecks. By cutting the time required to process large volumes of documentation from weeks to seconds, AI enables deals to close faster. For instance, Search Acumen estimates that the average firm could save 115 hours per month through automation, equating to over eight million hours annually across the sector.
Tools like Search Acumen’s REI are particularly effective in managing complex PBSA transactions. These typically involve large portfolios that require hours of meticulous due diligence, precisely the type of work digital tools can dramatically speed up while reducing the potential of human error. These tools are therefore invaluable for overcoming the sector’s unique challenges.
With our world-class universities and more students enrolling in higher education each year – a total of 2,937,155 higher education students in 2022/23 according to HESA, 2.77% higher than the year before – the future of the UK’s PBSA sector stands to be bright. Investment is growing to record levels, hitting £1.7 billion in Q2 2024—the highest quarterly figure since 2022, according to Knight Frank. This surge reflects growing confidence in the sector. The recent easing of inflation and interest rates also bodes well for the feasibility of new PBSA projects. Unite Students, a major player in the sector, reported a remarkable 97.5% occupancy rate for the 2024/25 academic year, alongside an 8.2% growth in like-for-like rental income. Their pipeline includes 4,600 additional beds set for delivery between 2025 and 2028 at a cost of £913 million, highlighting the sector’s potential to address the crisis when processes are time efficient and productive.
Embracing digital innovation should not be seen as simply a convenience—it is a necessity for the longevity of the sector. Accelerating legal and administrative processes is critical to increasing the availability of student beds, quickly. By leveraging AI and other digital tools, progress can be made in tackling the shortage. With smarter systems in place, the sector can move closer to solving one of the most pressing issues facing a highly tech-savvy generation. It is only fitting that the solutions be reflective of those they are catering for.
